Dual ASX and NASDAQ-listed Piedmont Lithium (ASX:PLL) has confirmed rumours over the last few days, selling off all its shares it holds in lithium player Sayona Mining (ASX:SYA).
Piedmont was Sayona’s largest shareholder with a 9.72 per cent stake.
PLL pawned off 1.152 billion shares at 5.2 cents through a block sale via Canaccord Genuity.
As of 12:15 pm AEDT today, Sayona shares had tanked 23.44 per cent to 4.9 cents with share turnover reflecting 1.178 billion shares for $61.097 million.
The move sees a major player dumping its shares in Sayona, which – across the last six months – has become one of the most firmly shorted stocks on the ASX.
It also shows the level of turmoil caused by falling lithium prices as Piedmont – itself a US-facing lithium major – now strategically divests its holding in a peer. But its communications were definitely sugar-coated.
“This transaction underscores our commitment to delivering long-term value for Piedmont shareholders,” Piedmont President and CEO Keith Phillips said.
The CEO outlined Piedmont’s original decision to purchase a nearly 10 per cent stake in SYA was as part of a Quebec-based JV. Perhaps curiously, perhaps not, the company says it remains committed to its partnership with Sayona.
“Our associated offtake agreement are core assets of Piedmont, and we look forward to continuing to work closely with Sayona to supply lithium critical to the US electric vehicle supply chain.”
But that EV supply chain is a large part of why Sayona has been getting battered by short sellers.
Sales have been declining globally at mixed paces but remain strongest in China and the EU.
But even in those markets, the removal of what were ultimately tax benefits for consumers – all major markets have wound back subsidies in the recent past – are putting a dent in sales.
(In the Australian context, people just appear to be unwilling to drive them.)
As of lunchtime today, Sayona remains the fifth most shorted stock on the market.
The top five most shorted stocks, bar one, are all lithium (or graphite) plays exposed to the EV thematic – excluding IDP Education (ASX:IEL), a recent addition to the top five.
And poor sentiment attached to Sayona from short activity is all but guaranteed to extend further on the back of Piedmont’s news today.
What comes next for Sayona remains to be seen, and is sure to be closely watched.
After Piedmont’s exit, the largest shareholder is now an HSBC entity holding 7.19 per cent.